30 Aug 2022, 13:32
Edgar Meza Julian Wettengel

Econony mininister lays out conditions for companies seeking Germany's gas levy support

Deutschlandfunk / Handelsblatt

German economy minister Robert Habeck has laid out additional criteria for gas importing companies that seek support under the country's new gas levy scheme, after the measure faced mounting criticism. The government introduced the levy for gas consumers to help importers avoid bankruptcies and prevent large-scale distortions to the market. It is intended to pay for the extra costs that importers have to bear due to the curtailment of Russian supplies for the short-term and expensive procurement of alternative gas, which they cannot pass on to gas customers with long-term contracts at fixed rates. However, the regulation was criticised for allowing all affected companies to seek the support even if they do not need it, or even make record profits due to the current high energy prices.
Habeck now told public broadcaster Deutschlandfunk he aims to reform the scheme and narrow the field of eligible companies. The minister said only companies that provide a critical amount of gas – which is necessary for gas supply security in Germany – should receive support. In addition, these gas volumes must be a significant part of the company’s business, and the businesses would not be allowed to pay out bonuses or dividends. In order to get support, relevant data would also have to be disclosed and that would be enough "to weed out these companies," he added.

Habeck is also advocating for the introduction of a windfall profit tax to be paid by profitable energy companies. The economy ministry is currently seeking to reform the electricity market in order to limit price hikes. Criticism of the gas levy had increased over the past week as a large number of companies that have made billions in profits have also applied for support. In addition, the levy would also allow companies to receive compensation at current market prices rather than the actual purchase price, which could be considerably lower depending on the exact time it was bought, reported Handelsblatt.

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